Everyone remembers seeing Reeses Pieces candies in the movie "E.T." and Audrey Hepburns Givenchy apparel in "Breakfast at Tiffanys." Seinfelds favorite cereal brands are well known to all regular viewers of his NBC television show. These are just a few of the multitude of branded products that appear in movies or television programs. This practice of product placement usually involves a fee that manufacturers pay to have their products included as background on television and movies. Consumer marketers spend an estimated $50 million annually in product placements in the movie industry alone (Elliott 1997).

Even though its effectiveness as an advertising tool appears accepted among practitioners, product placement has not generated much research interest in the marketing discipline. Previous studies of product placement have focused on brand recall or recognition (Steortz 1987, Babin and Carder 1996) or attitudes towards product placement (Gutpa and Gould 1997). Moreover, there is no apparent theoretical framework which describes this phenomenon. The objective of this paper is to present theoretical support for a framework for how product placement works. The articulation of the theoretical framework is best summarized in terms similar to McCrackens meaning transfer model (1988). As depicted in Figure 1, we posit an adapted meaning transfer model in which the product meaning associated with a popular television show or movie is ultimatey transferred to the individual viewer.

We first differentiate between types of placement and posit a three dimensional framework based on the information modalities of the placements. We then incorporate transformation as a means for assessing the effectiveness of a placement. Finally, we examine the nature of the show-product linkage in terms of learning theory, and the strength of the show-individual linkage in terms of behavioral modeling.

PRODUCT PLACEMENT: AN INFORMATION PROCESSING PERSPECTIVE

A Three-Dimensional Framework of Product Placement

Previous research on product placement has mostly been limited to measuring brand recall to assess effectiveness. One of the few empirical studies on product placement indicated that viewers were able to recognize brands placed within a film (Babin and Carder 1996). However, the study only dealt with one form of product placement: the visual appearance of the brand on the screen. We posit three types of product placement which are categorized according to their modality and relevance. For audio-visual media, such as television and cinema, we first differentiate between the forms of product placement based on their different information modalities (cf. Bettman 1979).

A brief examination of TV shows and movies reveals that placement types vary along two main dimensions: visual and verbal or auditory. A purely visual type of placement involves placing the brand in the background of a show in one of two ways: either through creative placement, which insinuates the brand into the film, such as with outdoor advertisements in street scenes; or through on-set placement, which positions the product on the film set itself, such as food brands placed in kitchen scenes. In the remainder of this paper, this is referred to as screen placement. Screen placement can have different degrees, depending on the number of appearances on the screen, the style of camera shot on the product, and so on.

The second dimension is auditory or verbal. This type of placement refers to the brand being mentioned in a dialogue. There are also varying degrees of audio placement, depending on the context in which the product is mentioned, the frequency with which it is mentioned, and the emphasis placed on the product name (tone of the voice, place in the dialogue, character speaking at the time, etc.). This purely verbal type we label script placement.

In some cases, the product becomes part of the plot, taking a major place in the story line or building the persona of a character. This type of placement, which we call plot placement, constitutes the third dimension of our framework. It consists of any combination of visual and verbal components and can be conceived as the degree of connection between the product and the plot. A mere mention of the brand combined with a brief appearance of the product on the screen is considered low intensity. However, in cases where the actor is clearly identified with the brand, e.g. James Bond with his Aston Martin, then BMW Z3, or where the brand becomes a central part of the plot, e.g. Kenny Rogers Roasted Chicken episode in "Seinfeld," such cases constitute high intensity plot placement.

We now describe the theoretical premises underlying expected differences in effectiveness for each of these three types of product placement.

Different Processing Codes for Different Types of Placement

From an informationprocessing perspective, script, screen, and plot placements differ in the types of processing they require. Perceptual encoding refers to the "process by which the individual, having attended to some stimulus, interprets that stimulus" (Bettman 1979, p. 25). In his study of how incoming stimulus information is transformed and elaborated within the organism, Paivio (1971) distinguished between these imaginal and verbal coding processes. When analyzing the recognition memory and memory storage associated with each code, he identified imagery as a "parallel-processing system" whereas verbal processes were assumed to specialize in "serial processing" (1971, p. 180). Hence, visual images and verbal units involve different memory codes.

The coding redundancy hypothesis, which states that "memory increases directly with the number of alternative memory codes available for an item" (Paivio 1971, p. 181) has clear implications for product placement. Since visual and audio dimensions activate different processing codes, varying combinations of screen and script placement differ in effectiveness and brand recall (Paivio 1971). As illustrated in Figure 2, pure screen placement would initiate visual processing, whereas pure script placement would require only verbal processing. A plot placement that relies on placing the brand both on the screen and in the conversation provides an opportunity for both verbal and visual encoding, whereas the other situations would likely activate only one form of encoding. Paivios coding redundancy hypothesis provides logical support for the following research proposition:

Proposition #1: Plot placements which rely on both visual and audio information will produce higher levels of brand recall than pure screen or script placement.

Although not specifically identified as "plot placement", a telephone survey conducted by Steortz (1987) found that the average recall was significantly higher when movie placements involved both visual and verbal product identification.

Another implication of Paivios research pertains to the superiority of visual over verbal mediators, when not simultaneously available (Paivio 1971). Paivio hypothesized that information in verbal mediators would be harder to retain than information in imagery mediators because the latter are more readily available. This finding implies that screen placement is more valuable in terms of its mnemonic ability and decoding accuracy. However, according to the social learning paradigm, "most of the cognitive processes that regulate behavior are primarily verbal rather than visual" (Bandura 1971, p. 18). These differences suggest that product placement effectiveness may well be a function of individual processing styles. In the following section we describe how style of processing moderates product placement effectiveness.

Individual Processing Style Differences as a Moderator

Recent research in consumer behavior has identified individual differences in processing styles as a determining factor of the effectiveness of visual and verbal messages (for a more extensive review, see Childers, Houston and Heckler 1985). Childers et al.s Style of Processing (SOP) scale can assess an individuals "preference and propensity to engage in a verbal and/or visual modality of processing" (1985, p.130). According to their experiments, an individuals style of processing will determine his/her allocation of attention to visual and/or verbal cues. Even though their measurement solely dealt with print material, we can anticipate similar individual differences with audio-visual material. For instance, a visual style of processing will lead an individual to allocate more attention to the visual cues, and therefore, be more aware of screen placement. On the other hand, script placement would receive more attention from viewers with a more verbal or audio style of processing. Consequently, when assessig the effectiveness of product placement types, it is necessary to account for individual differences in processing style. This observation leads to our next proposition:

Proposition #2: Individual differences in style of processing moderate the effectiveness of the different types of product placement. In other words, individuals higher in visual processing will attend more to screen placement, whereas individuals higher in audio processing will pay more attention to script placement.

Having established a method for classifying the different types of placements and specified differences in how each type of placement is processed, we now turn our focus to the nature of the effectiveness of product placement. The concept of transformational advertising offers insightful guidance for this aspect.

ASSESSING THE EFFECTIVENESS OF PRODUCT PLACEMENT IN TERMS OF TRANSFORMATION

The notion of transformational advertising was first raised by Wells (1980) as a framework for understanding how advertising works. Transformational advertising involves the association of "the experience of using/consuming the advertised brand with a unique set of psychological characteristics" (Puto and Wells 1984, p.638). A transformational advertisement would therefore make the experience of using the brand richer and more enjoyable by connecting the experience of the ad with that of using the brand in such an intimate fashion that "consumers cannot remember the brand without recalling the experience generated by the advertisement" (Puto and Wells 1984, p.638).

Drawing a parallel between traditional advertising and product placement enables us to identify a successful product placement as one that transforms the experience of using the brand to match that shown in the movie/TV show. In order to justify product placement as a transformational experience, its host environment (television and cinema), is analyzed on each of the four dimensions of the transformation concept: 1- personal relevance, 2- experiential/empathy, 3- informational, 4- executional (Puto 1986). Because this technique involves products being placed inside a TV show or movie, we can envision it as a form of endorsement by a (several) member(s) of the cast. Drawing evidence from traditional celebrity endorsement research as well as research in the mass communication discipline, we now address product placement in the context of each of the four transformation dimensions.

Personal relevance refers to the degree to which the viewer connects him/herself with the TV show/movie (cf. Puto 1986). In mass communication research, relevance can be assessed as an intersection between the textual and the social, e.g. between plot and everyday life (Fiske 1992). Since movies are often described as a form of art, we can draw evidence for the personal relevance component from the study of art. It has been well-documented that, through our artistic experiences, we view ourselves metaphorically as the characters in novels, plays, or movies (Hirschman 1988). The construct of personal relevance is even more evident in realistic settings, which tend to reproduce an ordinary context, where the setting and story line make relevance to the viewers life obvious. Therefore, placing real products inside these shows intensifies the authenticity and salience of the television show/movie for the viewers (Shermach 1995).

Experiential / Empathy: A Projective Function

As noted by Puto (1986), the concept of personal relevance is very closely related o that of empathy. Besides depicting the personal relevance dimension of TV series heroes, or movie stars, many researchers have also accounted for a phenomenon of identification to characters, which is directly related to the empathy dimension (Fiske 1992, Livingstone 1990). Empathy in this context is defined as "an observers vicarious emotional identification" with the TV series or movie (Puto and Wells 1984, p.639). Extensive research has shown that "popular culture narratives serve as valuable projective functions for consumers" (Hirschman 1988, p. 357). Because of their regularity, television series, and particularly soap operas, have actually been referred to as the "safest outlets for vicarious identification" (Mitroff and Bennis 1989, p. 80). Because it is the main ingredient of product placements effectiveness, this emotional dimension will be the object of a subsequent section in this paper, where we highlight this identification process.

Informational: A Symbolic Contribution

In traditional advertising, the informational dimension, refers to the ability to provide consumers with factual, relevant brand data (Puto and Wells 1984). Product placement differs from advertising in the fact that it is mostly indirect and does not usually intend to provide the viewers with factual information about the product. Whereas functional products may allow for more extensive information to be communicated by showing the product being used or providing specific information about that product, symbolic products may benefit more from the personal relevance or emotional components, described earlier. For these products, however, we can establish the informational nature of TV shows and movies as more ideological or symbolic. Studies of product symbolism have largely accounted for the contribution of the media in building a products symbolic meaning (Levy 1959, McCracken 1988). In their semiological analysis of the movie "Out of Africa", Holbrook and Grayson (1986) described how both major and minor consumption symbolism were used to enrich the plot, theme, and character. Popular television series such as "Dallas" or "Dynasty" also encode the ideology of consumption through "fantasy narratives populated by imaginary characters confronted by make-believe crisis and choices" (Hirschman 1988, p. 357). Products placed inside these programs become part of a story which is literally and figuratively rich in consumption imagery (Hirschman 1988). We can then consider the informational dimension of product placement as a symbolic one. It is widely recognized that, movie after movie, Humphrey Bogart contributed to the symbolic image of cigarettes, by associating smoking with a perception of masculinity, elegance, and sensuality. Since product placement is not designed for providing factual information to the viewers, we can anticipate that it will rely more on affective processes, rather than on the cognitive aspect of the experience.

Executional: The Need for a Good Match

This last dimension of the transformational concept, executional, highlights the importance of a well-executed ad in terms of likeability and memorability of the corresponding experience. Traditional advertising and product placement differ greatly in terms of their execution requirements. Whereas the advertising plot is built around the brand and limited in time, product placement generally involves placing the brand inside an already existing plot. Therefore this dimension does not so much refer to the execution per se, but rather to the good fit of the product inside its host show. Since we have defined product placement as a form of endorsement, we can relate the executional dimension to the match-up hypothesis developed for traditional celebrity endorsement. This hypothesis suggests that the characteristics of a product need to match-up with the image conveyed by the celebrity (see Kamins 1990). This topic is well-documented, and practitioners do eport that a good match is a necessary ingredient for successful product placements (Hulin-Salkin 1989, Mitchell 1996, Shermach 1995).

We have established that product placement satisfies all of the basic requirements for a transformational experience. This demonstration draws our next proposition, concerning the nature of the effectiveness of product placement:

Proposition #3: A successful product placement is one that transforms the experience of using/consuming the product to match that shown in the TV show/movie, i.e., this experience would not occur without the placement.

This proposition implies that the experience of using/consuming the product is different whether you have been exposed to the placement or not. We have demonstrated that the effectiveness of a product placement is directly linked to the transformation of the experience with the brand. In the remainder of this paper, we therefore define effectiveness as the power or ability of a well-placed product to transform the experience in a positive manner with respect to the brand being "promoted."

Now that the overall process of product placement has been identified as a form of transformation, we can focus on the internal links of the framework, the show-product link and the show-individual link (see Figure 1).

THE SHOW-PRODUCT LINKAGE IN TERMS OF LEARNING THEORY

This section focuses on the link between show and product and draws evidence from learning theory.

The Non-Conscious Nature of Product Placement

The concept of product placement relies on the pairing of a branded product with a host show. This pairing of stimuli directly evokes the classical conditioning paradigm. Classical conditioning is generally accepted in the consumer behavior literature as a mechanism relevant for understanding and producing advertising effects (Stuart, Shimp and Engle 1987). The conditioning paradigm is based on the transfer of responses between stimuli. Pavlovs experiments led to the conclusion that the repeated pairing of a Conditioned Stimulus (CS) with an Unconditioned Stimulus (US) will cause the CS to elicit a Conditioned Response (CR) in an unconscious, automatic fashion.

The foundation of the classical conditioning theory lies in the non-conscious link between the two stimuli. Supporting evidence can be found in the Internal Processing Algorithms (IPAs) posited by Lewicki (1986). IPAs refer to "the memory representation of covariation between two or more features or events" (Lewicki 1986, p. 29). Lewicki demonstrated that IPAs are acquired non-consciously, that they non-consciously influence behavior, and that they cannot be controlled consciously. Lewicki based his non-conscious processing research on the observation that people usually cannot control such behavioral reactions as laughing or crying when watching a movie, that they cannot "define the specificity of the situation" (1986, p. 9). His experiments focused on influencing information processing without affecting the perceivers conscious awareness: subjects were exposed to stimuli containing a covariation that was not accessible to conscious awareness and were then asked to complete a task related to the covariation. Results provided support for the hypothesis that humans do acquire information non-consciously and store it in long term memory, without being aware of the source of the covariation information.

In the case of products placed in the background of the screen, it is apparently the goal of advertisers to rely on non-conscious linkage between stimuli, and therefore we can consider that the "endorsement" is processed non-conciously.

Proposition #4: The show-product linkage is processed non-consciously by the viewers: it is not necessary for the viewer to recall a specific exposure to the product for transformation to occur.

This proposition strictly parallels one from the transformational advertising concept (Puto 1986) and underlines the need for repeated exposures to the stimuli.

Affective Transfer

Classical conditioning stresses the conditioned emotion-eliciting properties of the stimulus (Staats 1996). For example, Staats demonstrated that the pairing of positive words such as beauty, honest, smart, rich, and so on with a person would increase the degree of positive reinforcement associated with that person (1996). Analogously, if the emotional response associated with the stimulus is negative, the reinforcement can go in the other direction and generate a negative affective transfer.

In traditional celebrity endorsed advertising, the focus has mainly been on the celebritys influence on the viewers affective/feeling state (Petty and Cacioppo 1981, Allen and Madden 1985). Hence, we can anticipate that affective conditioning drives most of the product placement process. Empirical evidence for the affective conditioning of products exists in the marketing literature. Even though they generated a great deal of controversy (Allen and Madden 1985, Bierley, McSweeney and Vannieuwkerk 1985), Gorns results demonstrated that product preferences can be conditioned through a single exposure to appealing or unappealing music (1982). This finding supports Zajoncs proposition that affect does not require extensive cognitive processing (Zajonc and Markus 1982). From this, we can induce that the nature of the conditioned response linked to product placement is mostly affective. Although it is not the objective of this paper, we also recognize that this transfer of affect is bi-directional as it can also occur from the product onto the show, if the emotional association with the product is strong.

Proposition #5: The pairing of a product with an emotionally rich show (television or movie) conditions a transfer of affect from the show to the product. Therefore, the nature of the conditioned response to the product is affective rather than cognitive.

This proposition suggests that placing products within shows that elicit positive/negative emotional responses will translate into a similar emotional response to the product. Obviously, this observation raises the issue of a negative-paired association, such as when products are placed in a non-flattering or disparaging situation. Many practitioners consider this a risk inherent to the technique (Shermach 1995) and a logical consequence of the advertisers lack of control on the use of their products (Hulin-Salkin 1989, Mitchell 1996). Similarly, if the products placed in the show have a negative content, or are ethically-charged, the positive emotional transfer may not occur as anticipated. Gutpa and Gould (1997) noted that consumers may alienate such product placements, therefore canceling any chance for positive reinforcement, and subsequent positive transformation.

Some Limitations to the Application of the Conditioning Paradigm

A central debate in the conditioning research with humans has revolved around the issue of awareness and whether or not the US/CS associations are consciously processed (Allen and Madden 1985). One could argue that, in some cases, product placement is so intense that, at least for some individuals, its presence becomes conscious. Two elements can potentially affect the effectiveness of classical conditioning of product placement.

One such factor concerns the potential effects of prir knowledge of or familiarization with the product. Some have suggested that "classical conditioning would be retarded if either or both the conditioned and unconditioned stimuli are already familiar" to viewers (Stuart, Shimp and Engle 1987). Numerous experiments have shown that prior arousal as well as the number of repetitions of the stimulus both influenced the clarity of a percept (Paivio 1971). The intensity of the placement may also impair the conditioned response. For instance, in cases where the plot is inundated with messages about the product (high intensity plot placement), it would be difficult for a viewer not to be conscious of the commercial effort. Likewise, combining product placement with a full joint-promotion campaign usually ensures that the consciousness level is reached. This practice has been reported by practitioners as much more effective than mere placement (Hulin-Salkin 1989), because it emphasizes the presence of the product and creates conscious awareness.

In both cases, the commercial intent of the placement becomes clearer. It has been noted that when the possibility of causal cognitive explanations is allowed, the traditional classical conditioning model does not apply (Allen and Madden 1985). These limitations are highlighted in the following proposition:

Proposition #6: The higher the level of pre-familiarization with the product and/or the stronger the perceived presence of the product in the show, the better the clarity of the perception of product placement. In such cases, the nature of the response to the product is cognitive rather than affective.

THE SHOW-INDIVIDUAL LINKAGE IN TERMS OF BEHAVIORAL MODELING

The latter part of this paper focuses on the show-individual linkage and the underlying causes of the emotional arousal in movies or television series. The ample literature on the role of the media in our lives forms the basis for the analysis of this process in terms of the behavioral modeling paradigm.

The Behavioral Modeling Paradigm

The modeling paradigm is conceptually linked to vicarious learning (Nord and Peter 1980). It assumes that observational learning occurs through reinforcement of imitative behavior (Bandura 1971). Almost any behavior can be acquired, maintained or extinguished by means of a carefully planned social reinforcement (Zajonc 1966). Social learning theory assumes that modeling influences operate principally through their "symbolic representations of modeled events, rather than specific stimulus-response associations" (Bandura 1971, p. 16). For instance, the mere observation of the behavior and attitudes exhibited by models contributes to the social learning process. Advertising has made intensive use of this theory by depicting positive consequences for the use of a product (Nord and Peter 1980). Similarly, the transformational power of product placement lies in the positioning of a product in a positively reinforcing situation.

It has been noted that the behavior modification is directly related to the value of the reinforcing agent (Bandura 1971). Referring to the classical conditioning paradigm, the reinforcing power of the stimulus is determined by the strength of the emotional response that it elicits (Staats 1996). The strength of the model in modifying behavior thus lies in the relationship between the actor/actress and the viewer. Much evidence can be drawn from the study of social influences in the sociology and social psychology discipline.

The Social Influence Power of Television and Cinema

Character representation differs signifiantly between television and cinema, and assessing product placements effectiveness in terms of behavioral modeling requires that a distinction be made between TV and cinema. In motion pictures, characters may serve as role models for the consumers who view them, but a film is usually an entity, and the characters story ends with the movie. Television differs because of its serial form, and its recurrence (Fiske 1992). The lead characters appear to live in similar time scales to their audience and exceed their textual existence, so that audience members can relate to them in terms of familiarity and identification (Fiske 1992). Although they differ in some respects, television and cinema share the ability of engendering a process of identification.

In the field of communications, the study of television influence is often associated with the cultivation paradigm (see Gerbner et al. 1980). The cultivation hypothesis is based on the premise that televisions images cultivate the dominant tendencies of our cultures beliefs, ideologies, and world views. A noteworthy element of cultivation research is the concept of resonance. Resonance characterizes the amplification of issues particularly salient to certain groups of viewers (Gerbner et al. 1980). Support for the cultivation hypothesis and particularly the resonance effect can be found in the consumer behavior literature. In their recent study of consumer socialization through television, OGuinn and Shrum (1997) demonstrated that heavy viewers of soap operas and "L.A. Law" over-estimated the prevalence of products and activities associated with affluent lifestyle.

In terms of product placement, the resonance hypothesis suggests that individuals to whom the story line or character development is most salient would be more affected by the content of the movie or television show. This effect corroborates the fact that it is the strength of the connection with the model that drives the modeling effect (Bandura 1971). Therefore, we propose that the transformational effect of a product placement will be mediated by the level of connectedness between the individual viewer and a television program/movie.

Proposition #7: The higher the degree of connectedness/association with the show/actor, the greater the affective transfer, and the stronger the transformational effect of product placement.

This proposition completes the theoretical framework for the product placement process and subsequently assessing the effectiveness of specific product placements.

CONCLUSIONS AND RECOMMENDATIONS

We have demonstrated through the extant literature that a successful product placement transforms the experience of the use/consumption of the product to match that depicted in the show and that the transformational power of product placement relies on a conditioned transfer of affect motivated by the influential role of television and cinema. At a time when traditional advertising faces the growing problems of audience fragmentation, rising rate cards, and cynicism among consumers toward media messages, the product placement industry is booming. However, the effectiveness of this technique still remains to be empirically tested. The theoretical propositions presented in this paper offer potential directions for future research on this alternative advertising and promotional medium. Future research should focus on each of the linkages identified in this piece, the show-product linkage, the show-individual linkage, and the product-individual linkage.

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